What’s the o­ne thing that keeps people from achieving the wealth and fame they probably deserve? It’s so simple, yet almost nobody knows how to do it. Without this o­ne thing, you might
achieve a little and do okay, but getting rich and famous will be far, far out of your reach. So, what is this o­ne crucial ingredient for the ultimate success? Blow your own horn!

That’s right–most people don’t know how to blow their own horn. They don’t know how to QUICKLY IMPRESS you with how much they know, how helpful they can be, how much they have achieved, how fast they can get new information, AND – most importantly – how they can help YOU get what you want.

Promoting yourself is absolutely crucial to becoming a well-known, trusted figure in your field. And mark my word, o­nce you become “famous” earning a fat paycheck is not far behind. Doors
will open. People with healthy bank accounts and wallets fat with credit cards will practically INVENT ways to give you money. All it takes is a deep breath and a little know-how.

So let’s start promoting you. Here’s how:

1. Write down a list of every cool thing you have ever done. Make note of all the fun, interesting, complicated, or action- filled experiences of your life. Try to slant your list toward experiences that could show how you can help somebody else in your field.

For example’s sake, let’s say your list includes:
* Took a lifeguard course–learned CPR and how to keep cool in emergency situations.
* Worked your way up to assistant manager at a donut shop where you were in charge of arranging work schedules and ordering new inventory.
* Spent a couple of years going to college where you took English composition, physical science, two business management courses, and financial accounting.
* Now you read the boss’s copy of the Wall Street Journal every day, and spent last Saturday at the library sitting in a comfy chair reading through all the latest popular business books.

Now let’s BLOW YOUR HORN. Granted, there are millions of people who have experience very much like yours, but there is no reason we have to make you sound ordinary.

2. Write a paragraph that briefly shows how your life experience qualifies you to be a big help to someone in your field. Let’s say you want to consult over-worked managers like your boss. Your
paragraph might be:

I learned how to think clearly and act fast in crucial situations while training to be a life guard. Later I mastered managing people and materials while working in management and inventory
control for a busy mid-sized business. That experience, in addition to my university training in management, analytical thinking, and concise communication, have given me a sharp mind and a cool head. Now I stay abreast of cutting-edge trends through industry periodicals and books by important thinkers.

Wow! You sound pretty impressive, don’t you? A boss in sore need of clear thinking and new ideas (and what manager isn’t?) would welcome having a person like you sitting in her office tossing out thoughts and ideas. And it’s all because you learned how to blow your own horn.

3. Now get covered by media. Mass media has mass audiences. It is the instant way to become famous. Start by doing something that gives media a reason to feature you. You can:

* Crate something big and important
* Stage an event that is visual, unusual, or downright crazy
* Comment publicly o­n a current controversy
* Write an article for trade publications or ezines
* Write a short book and publish it yourself, then send copies to local radio, TV, and   newspapers.

4. Repeat the process as often as you can. Keep adding your  accomplishments to your “Blow Your Horn” paragraph. When youcreate a new event, tell about it in a press release, including
your “Blow Your Horn” paragraph at the bottom. Send the release to local media, trade publications, and businesses you might want to work with.

If you get nothing else from this article, get this: Don’t keepyour greatness a secret. YOU ARE GOOD AT SEVERAL THINGS. Tell the world!

Once upon a time there was a man named Joe who decided he wanted to be a fisherman. He went out looking for work and found a job o­n a fishing boat. Joe was very dedicated and hardworking. He planned o­n working o­n the

boat the entire day. After all, the boss had promised extra incentive for those who would. During the middle of the day his boss came to him and said, “Joe, you’re a terrific employee. I can provide you food and shelter while you’re o­n the boat, but I’m not going to be able to pay you that extra incentive at the end of the day. However, here’s a net. Throw it out there and hope for the best.”

So Joe found a good spot to the side of the fishing boat and threw out his net. Lucky for him, he put out his net in a place full of all kinds of fish. Periodically he would look over the edge at the net and was pleased that the amount of fish was growing.

Finally it was time for the boat to return to shore. Joe started to draw in his net when he noticed something-all of the fish were slipping out into the water! How could this have happened? Everything seemed to be going so well. But upon closer inspection, Joe realized his net had a very large hole in it. Joe had not thought to check it before he threw it out, because Joe really didn’t know that much about fishing. Now Joe had to go home, empty-handed and hungry. As far-fetched as this little parable may sound, it’s not too far from the truth when it comes to retirement, at least according to several key people in the finance industry. You see, we are no longer in the age of pensions. We don’t receive a monthly paycheck at the end of our working years (that extra incentive that was promised Joe). We live in the age of Employee-Funded Retirement Plans, also known as 401ks, IRAs, and Roth IRAs. We are expected to provide for our own retirement (here’s a net; hope for the best), which would be fine if we had some idea of what we’re doing. But, alas, we don’t, and most of us failed to check our net before we threw it into the stock market.

Yes, the stock market. Investing in 401ks and IRAs is investing in the stock market. Most people don’t really know how to invest in the stock market, but they think they’re doing a pretty good job of “fishing”, as Robert T. Kiyosaki, author of the Rich Dad, Poor Dad series of books, explains in his book Prophecy: Why the Biggest Stock Market Crash in History Is Still Coming…and How You Can Prepare Yourself and Profit from It!. The problem, as he and other financial leaders see it, is that the stock market growth is being propelled by the numerous, albeit investment-ignorant, Baby Boomers, all desperately investing in order to “save something for retirement.” The law that allows this, the Employee Retirement Income Security Act (ERISA), is, at least for now, fatally flawed-and here is where the hole in the net comes into play. ERISA forces people to start withdrawing money when they reach 70 ½ years of age. The first of the baby boomers reach this point in the not-too-distant year 2016.

That’s a pretty big hole in the net, because we all know that there are more baby boomers working than there are workers to replace them. So what happens when there are more people who are being forced to sell their stocks and convert it into cash to live o­n than there are people to buy that stock? The price of stocks declines (the old economic law of supply vs. demand). People start noticing that their portfolios are dropping in value, rather rapidly. People get nervous. People sell. Stock values decline further. The cycle continues until you have a full-blown stock market crash. Sorry-despite what you’ve heard, diversifying will not save you. No sector will be safe. Everything you’ve worked so hard to “save” in the stock market could easily be wiped out in a very short period of time, as many people learned in the stock market crash of 2000.

There are other factors that Mr. Kiyosaki discusses in his book that could hasten this crash, but they will not be discussed here. The simple fact is, most of us have no idea what we’re doing when it comes to “investing” in the stock market. In fact, it’s pretty safe to say that we’re not “investing”; we’re trying to use the stock market as a savings vehicle, something it was not designed to do. At the first sign of major trouble, most of us will turn tail and run, trying to “get out “while we can.

However, all is not lost, but you must take the power back into your own hands. If you are truly interested in protecting yourself from this coming crash, you need to get educated about investing, not saving. You need a way to have residual income, regardless of what the stock market does. Check out some of the Resources links o­n this website to find books and other resources to help you become informed. After all, your future is at stake, and you don’t want to go home at the end of the day hungry and empty-handed.

No, this is not some futures or commodities trading strategy. You don’t have to join a cult or an MLM. And you can do this for years.

The o­nly qualification is that you have a mortgage or home equity loan.

You can achieve more than 100% returns o­n your money simply by paying extra money o­n your mortgage each month or as often as you like.

Here’s how it works: If you have a 30 year mortgage at 7%, for each $100 of your loan amount you will end up paying as much as $209 in interest. So within the 30 years of paying off your mortgage, you will repay that $100 that you borrowed PLUS you will pay up to an additional $209 in interest.

So if you “invest” an extra $100 along with your first mortgage payment, you will end up saving $209.42. That’s a return o­n your “investment” of 109%! And it’s guaranteed.

Plus you have just lowered the amount you are in debt and reduced the time it will take for you to pay off your mortgage. How many cold-calling investment brokers can offer you a deal like that?

So you could look at it as investing the $100 in your mortgage means that there is $309.42 you won’t have to pay out in the future. You could even argue that this is a return of 209%.

But what if you are several years into your mortgage. Well, even if you are 10 years into your mortgage (and the average mortgage o­nly lasts about 7 years these days), you can still save $139.42 in interest by paying an extra $100. Or if you are 20 years into your mortgage you will still save $69.42 by paying an extra $100.

So what have you got to lose but your mortgage debt?

So why don’t more people do this?

Probably because the conventional “wisdom” says that if you can earn a better rate with an investment than what you are paying o­n your mortgage you should invest instead. If you are paying 7% o­n your mortgage and you can earn 11% in the stock market, it seems a no-brainer that you should invest in the stock market.

There are two problems with this philosophy: first, the 11% stock market figure that is widely quoted is an average over the past 30 years. Returns in the stock market have averaged o­n a yearly basis both higher and lower than the 11% rate. How do you know when you are investing in a year with negative returns? Unless you are in the financial industry you are probably taking as big a gamble as you would in Las Vegas playing the Roulette Wheel.

The other problem is that both inflation and taxes will eat away at your 11% return. Taxes can eat up to 2% of it and inflation can take another 3%, leaving you with o­nly 6%, which is less than your mortgage. And that’s assuming you actually get the 11% return that year. Also remember that years in which high returns in stocks are enjoyed are also often accompanied by higher than normal inflation rates.

But some people will not be persuaded and will insist o­n investing in the stock market before paying off their mortgage and that is understandable. We all want to build some sort of retirement nest egg or have an emergency fund that is growing by more than the dismal rates offered by bank savings accounts or money market accounts.

But if paying down your mortgage makes sense at 7%, how much more sense does paying down your higher interest rate debts. If you have a credit card charging you as much as 24%, it makes way more sense to pay this off before investing any money in the stock market.

Some people would argue that it is good to invest always even if you have debt. But that is contrary to the overall goal of increasing your assets and wealth. For example, let’s say you owe $1058 o­n a 24% credit card and you have an extra $100 each month. You decide to make your minimum payments while investing the rest into the stock market.

If your stock market investment gives you a 12% rate of return you will have about $996 at the end of the year ($100 – min pmt x 12 months + “interest”). But you will still owe $1079 (more than you started with) o­n your credit card.

Viewed another way; you paid a total of $1200. Adding together the negative credit card balance and the positive investment value gives you have a net value of $-83.

Instead, if you use the full $100 to pay off your debt, you will be debt free at the end of the year. You won’t have an investment but overall you will not still be negative. The next year, you could invest the full $100 into the stock market. But if you still had your debt, you could o­nly invest $78.50 while still making your minimum credit card payment ($100 – min pmt: $21.50 = $78.50).

Now if you take this scenario and play it out over 5, 10, 15 even 20 years you can see how paying your debts off now can save you $1000s in interest and help you pay off your debts sooner. o­nce your debts are paid off you can use ALL of the extra money to invest.

Numerically it is much better to pay off your debts first. But since your stockbroker makes his money off your investing what do you think his advice will be?

From radio spots and junk mail to television and newspaper ads, American consumers are bombarded with invitations to utilize various banking and checking services. And even though they come with the obligatory fine print, so much of it remains a mystery to most of us. So how can you really know whether you are better off staying where you are at, or switching to a new service? From checking accounts to home loans, and a whole lot in between, here are some answers.

Checking

You can save more than $100 a year in fees by selecting a checking account with a low (or no) minimum balance requirement. There are usually stipulations attached so make sure you can meet them. Request a list of these and other fees that are charged o­n these accounts and compare carefully. In addition, banking institutions often will drop or lower checking fees if paychecks are directly deposited by your employer. Direct deposit offers the additional advantages of convenience, security, and immediate access to your money, so look into it if you don’t already have it.

Savings and Investment Products

Before opening a savings or investment account with a bank or other financial institution, find out whether the account is insured by the federal government (FDIC or NCUA). An increasing number of products offered by these institutions, including mutual stock funds and annuities, are not insured, which means you absorb 100% of the risk.

To earn the highest return o­n savings (annual percentage yield) with little or no risk, consider certificates of deposit (CDs) and treasury bills or notes. These are not liquid (easily accessible) investments and need to be left alone until they reach maturity, but they do carry a better return than a traditional savings account. Plan accordingly.

Once you select a type of savings or investment product, compare rates and fees offered by different institutions. These rates can vary a lot and, over time, can significantly affect interest earnings.

Credit Cards

You can save as much as a thousand dollars or more each year in lower credit card interest charges by paying off your entire bill each month. If you are unable to pay off a large balance, pay as much as you can and switch to a credit card with a low annual percentage rate (APR). For a modest fee, RAM Research Corp. (800-344-7714) will send you a list of low-rate cards. You can obtain a list of low-rate cards by accessing “www.ramresearch.com” o­n the Internet. In addition, you can reduce credit card fees, which may add up to more than $100 a year, by getting rid of all but o­ne or two cards, and by avoiding late payment and over-the-credit-limit fees.

When shopping for a credit card, look for more than just the low interest rate. Compare other fees (such as over-the-credit-limit or late payment) and also look at the billing cycles. Some cards have a 28-day billing cycle instead of a monthly o­ne, which can really throw off your budgeting. Also, you know all the “freebies” that the credit card companies offer you-like cash back, airline miles, etc.? You pay for them in the form of a higher interest rate, so decide whether they are really worth it!

Auto Loans

If you have significant savings earning a low interest rate, consider making a large down payment or even paying for the car in cash. This could save you as much as several thousand dollars in finance charges. Think about it-you could be earning minimal interest by keeping that money in the bank, or saving yourself substantial interest by paying cash up front.

If you need to finance your auto, you can save as much as hundreds of dollars in finance charges by shopping for the cheapest loan. Contact several banks, your credit union, and the auto manufacturer’s own finance company. Get the lowest interest rate for the shortest amount of time that you can.

First Mortgage Loans

Although your monthly payment may be higher, you can save tens of thousands of dollars in interest charges by shopping for the shortest-term mortgage you can afford. o­n a $100,000 fixed-rate loan at 8% annual percentage rate (APR), for example, you will pay $90,000 less in interest o­n a 15-year mortgage than o­n a 30-year mortgage.

You can also save thousands of dollars in interest charges by shopping for the lowest-rate mortgage with the fewest points. o­n a 15-year, $100,000 fixed-rate mortgage, just lowering the APR from 8.5% to 8.0% can save you more than $5,000 in interest charges. o­n this mortgage, paying two points instead of three would save you an additional $1,000.

If your local newspaper does not periodically run mortgage rate surveys, call at least six lenders for information about their rates (APRs), points, and fees. Then ask an accountant to compute precisely how much each mortgage option will cost and its tax implications.

If you are considering an adjustable rate mortgage loan (ARM), be aware that the interest rate o­n most ARMs can vary a great deal over the lifetime of the mortgage. Most ARMs lock you into a rate for 3-7 years, and then begin varying. An increase of several percentage points might raise payments by hundreds of dollars per month. If you know you will o­nly own your home for just a few years, an ARM might work for you if you plan to sell before you move into the variable period.

Mortgage Refinancing

Consider refinancing your mortgage if you can get a rate that is at least o­ne percentage point lower than your existing mortgage rate and plan to keep the new mortgage for several years or more. Ask an accountant to calculate precisely how much your new mortgage (including up-front fees) will cost and whether, in the long run, it will cost less than your current mortgage. Keep in mind that most refinancing loans reset your mortgage length to 15 or 30 years, not to where you are currently.

Home Equity Loans

Be cautious in taking out home equity loans. Although the financing industry touts these loans as a great solution to debt or as a way to get what you want right now (vacation, remodel, etc.), these loans reduce the equity that you have built up in your home. If you are unable to make payments, you could lose your home.

Compare home equity loans offered by at least four banking institutions. In comparing these loans, consider not o­nly the annual percentage rate (APR) but also points, closing costs, other fees, and the index for any variable rate changes. Your home is probably o­ne of your greatest assets, so take this kind of a loan very seriously.

In Conclusion

As is the case with most things, a little investment of time can save you quite a bit of money o­n your banking and credit services. However, your time is valuable, too, and the cheapest option may not always provide the services you need. Consider your options and make the best choice for your individual situation.

If you were to ask people o­n the street which they valued more: their time or their money, the most frequent response you would probably get is “My money!” After all, money seems to be what we’re constantly in pursuit of. It’s at the root of almost everything we do, and even a good share of the decisions we make are money-based. We work and/or invest to earn money; we comparison shop to save money; we earn more money so we can spend more money. (After all, the Joneses live right around the corner!)

However, the truly wealthy would answer differently. Their time is more valuable than their money. Most of them amass their fortunes not in the pursuit of wealth itself, but in the pursuit of the time and freedom to enjoy them. Their money allows them to spend time with their families, fund charitable causes, travel, and basically enjoy life, doing the things that are important to them. If you were to quit your job today, how long could you live o­n whatever money you have? Most people wouldn’t even last a week. Not very enjoyable, no doubt. But those who have learned how to make their money work for them and not the reverse could live indefinitely. They have discovered how to use their money to create time.

Have you ever considered what your time is worth? It’s a question that has o­nly recently come to the forefront of how we live, work, and play. What is your time worth? How do you go about calculating such an ephemeral and intangible thing? Why is your time an important consideration?

I o­nce read of an exceptionally thrifty person who, when building a home, pulled nails out of old used lumber from a demolition site, straightened them out, and used them! Now the first thing I’m thinking as I’m reading this is I certainly wouldn’t trust rusty nails to hold my house together. The second thing I’m thinking is this person has way too much spare time. The third thing I’m thinking is this person values money more than time. Instead of going to the hardware store and spending a few dollars o­n quality nails for the home that will protect his family, he chose to spend days, possibly weeks harvesting lesser-quality items just to save a few bucks. Seems like a pretty inequitable trade-off to me.

Each person values time and money differently, falling somewhere between miser and spendthrift. Our attitude toward money plays a significant role in how we make that comparison. How many times have you said you wouldn’t pay someone “that much” to do something? You make that judgment based o­n a comparison between the worth of your time versus your money.

So, how can you compare your time against your money? o­ne way to figure the worth of your time is to base it o­n what you earn in an hour at your job. In other words, what would it cost you to pay yourself to do whatever you’re doing? Let’s say you make $12 an hour (that’s roughly $25,000 a year). We’ll use this figure for the following 3 examples.

Example 1 Suppose it takes you an hour to mow your lawn. If you were to “pay yourself” to do it, that would mean it “costs” you $12 to mow it, and that’s not even considering the actual costs of lawn care, such as a mower, gasoline, oil, maintenance, etc. However, if you could pay the kid down the street $10 to it for you, you’re now ahead of the game.

Example 2 In an effort to save the $6 you would spend down at the car wash to wash your car, you decide to do it yourself. It takes you half an hour, so you’re even, right? Wrong! You haven’t factored in what it cost you in materials (cleaning solution, washing and drying items, water usage, etc.). Looks like you got the short end of the deal.

Example 3 Let’s say you have fairly uncomplicated taxes. You can go to a paid preparer and probably pay around $100 or more or you can tackle it yourself.

Scenario 1: You go the do-it-yourself route o­n paper; it takes you about 6 hours total. Total “cost” to you is $72 ($12/hour x 6 hours); net “gain” is $28 ($100 you would have paid minus the “cost”).

Scenario 2: You do it yourself with a tax software program that costs $25 and o­nly takes you 2 hours. Total cost is $49 ($25 for software + $12/hour x 2 hours); net gain is $51.

This is an instance when doing it yourself does save you money. How much it saves you is up to you.

Another way to weigh your time against your money is to consider whether you have or could gain the skills to do whatever you’re considering. Let’s say the engine goes out o­n your car and you decide to rebuild it. If you’re a mechanic, then great. You already have the skills to do it and you have access to the right parts. If your knowledge of the internal workings of cars lacks something, but you don’t “have the money” to get it done professionally, you might be tempted to do it yourself. But stop and consider whether you really will save anything, after you factor in parts, travel time back and forth (and gas) to pick up and exchange parts (because you probably got the wrong o­nes the first time), not to mention your time, and a few smashed fingers! Many people fail to realize that when the learning curve is huge, they’re not going to save themselves very much, and may even cost themselves more in the process.

The bottom line is, there are some things that you can do yourself that will save you money and others that won’t. Those are decision that you should always consider carefully. Granted there may be times when you flat out don’t have the money to pay someone else to do something for you. At that point your money is truly more valuable. But if you can “afford” it, then by all means do it if it makes financial sense. There’s no shame in paying someone else to do something you can’t or don’t want to do anyway. Consider it doing your patriotic duty by boosting your local economy!

Now, of course, “saving time” o­nly works if you put the time to good use. The time you save by paying someone else to do something for you should be put to use bettering yourself or your skills, learning something new, increasing your residual income, etc. After all, the rich don’t get rich by paying someone to mow their lawn while they sit and watch television; they get rich by learning. If you can use that time to learn how to create more time then the sky is truly the limit. If you sit in front of the television and waste it away, you’ll never gain the true freedom that comes from being able to enjoy what your money can do for you.

We all wish we could have more hours in day. You probably never imagined that you have the power to create that time. Look for ways to “save” your time instead of your money and then use that time wisely. Your time or your money? You make the call.

When it comes to managing finances, most people would probably receive an F. The truth is, many of us were never taught the basics of money, how it works, and how to handle it. Here are some tips to help get you o­n your way to better money management.

Handling Your Money

Invent games to play with your money. For example, set aside certain bills or coins and see how long you can keep a $20 (or whatever denomination you choose) without breaking it for gum, a magazine, or some other frivolous item. Have a spare change jar and empty it into your savings account each month. At the end of every day, empty out your wallet and put the change in your jar. Don’t limit it to just coins, toss in those few bills that are lingering in there as well.

Never spend a windfall. Take your income-tax refund (which should be minimal, if you follow the tip below), money gifts, bonuses, rebates, overpayment refunds and any other unexpected money and put it into your savings or investments. Make this money earn money for you.

Use direct deposit and automatic withdrawals to move money out of your checking account into savings or investments o­n a regular basis, such as every paycheck. You will learn to live o­n less when you think you have less to spend. Fool yourself into saving.

Avoid Overpayments and Fees

Don’t give the government a free loan by overpaying your taxes. Every time you get a refund from the IRS that is a sign that you overpaid your taxes and gave the government an interest-free loan for up to a year. Adjust your withholding allowances and try to get your refund down to less than $100. Your paycheck may go up a bit in the mean time so be sure to put that extra money in the bank for future purchases or emergency savings.

Avoid unnecessary fees. ATM fees, service charges, and late fees all add up to quite a bit over the course of a year. These fees are rarely worth the reason they were charged. A little planning/budgeting can usually circumvent these fees. Also avoid insurance charges when renting a car. Most credit cards have car rental insurance as a feature of the card. Check with your card issuer for the terms and conditions of rental car insurance.

Keep your checkbook and accounts balanced. You should always have a pretty good idea of how much money is available in your account. Purposely writing bad checks can land you in jail. Inadvertently writing them can sack you with overdraft fees from your bank as well as returned check fees from the store or company you wrote the bad check to.

Shopping

Buy o­n sale as often as possible. When you want something wait a week to see if it is going to come o­n sale. Or ask the store when the item will be o­n sale. Buy clothing out of season for the best bargains.

Haggle. You never know when someone will be willing to lower their prices or throw in something extra. Just ask. It may be hard to find a person who can make a pricing decision but when you do, give it a try and see what happens.

Throw away your mail order catalogs. Don’t even look at them. Looking leads to wanting and wanting to buying. Most catalog purchases go o­n your credit cards and that is the last place where you want to rack up debt for what is usually more junk. Remove yourself from their mailing lists (which lists are often shared with other mail order companies). In addition, when filling out customer response cards (such as for warranties, etc.) give o­nly the basic information they need such as name and address; skip the “getting to know you” questions. The answers to those questions are farmed out to mail order companies, increasing your junk mail even more.

Use coupons, apply for free samples, stock up o­n sales (if you have some extra money to do so), shop discount stores, day-old bakeries/items. Buy store-brand over name-brand items. Forgo brand loyalty in favor of better prices. For the most part, the most expensive part of a product is its packaging, so don’t be swayed by fancy designs in beautiful colors.

Shop less frequently. Each time you go to the store, you increase your chances of purchasing an impulse item. Try to limit your grocery shopping to o­nce a week and prepare a list beforehand and stick to your list. You’ll be amazed at how much this little tip can save!

Investing the time to learn how better to manage your money is an important step toward gaining financial freedom. Improving money handling, avoiding unnecessary payment of fees, and shopping more wisely are all integral parts of better money management. Take the time to implement some of these tips and watch your money grow!

Whether you rent or own the place that you live, chances are pretty good that a large portion of income goes to pay for it. You may find yourself wondering how you can save any more money o­n your housing. What follow are some ideas to help you save money o­n renting, buying, or improving your home, as well as purchasing major appliances.

Renting a Place to Live

Rental properties (and rates) can vary widely, even in the same area. Do not limit your rental housing search to classified ads or referrals from friends and acquaintances. Select buildings where you would like to live and contact their building manager or owner to see if anything is available. Remember that signing a lease probably obligates you to make all monthly payments for the term of the agreement. As with most other things, weigh the cost of the rent against other factors, like the area, convenience, access, length of contract, etc.

Home Purchase

When purchasing a home you basically have three options-you can use a real estate agent, you can buy a home for sale by the owner, or you can build a new home. Each has its pluses and minuses. A real estate agent can help guide you through the process, and point out good and bad things about the home you are looking to purchase. He/she can help you arrange financing and handle most of the paperwork, as well as arrange for the closing and turning over of the keys, etc. However, you generally (but not always) will pay a higher price because the agent’s (usually) 6% commission is figured into the price of the house.

If you choose to use a real estate agent, do not choose the agent who represents the home you are interested in buying. If you do, that agent then has a conflict of interest, representing both buyer and seller, and you generally will pay a higher price. Instead, select a buyer’s agent or broker who will represent o­nly you. He/she will be in a better position to negotiate a lower sale price.

Choosing to buy a home for sale by owner may save you money, but will require a lot more time and legwork o­n your part. You will need to do some research to determine whether or not the home is worth the asking price (information that real estate agents generally have easy access to). You will have to arrange for an appraisal and inspection.

Be sure you fully understand the terms of the seller’s agreement before you sign it because you will be legally bound to it. If you are selling your existing home and buying another, make sure the seller’s agreement o­n your new home stipulates that your purchase of that home depends o­n the sale of your other home. Otherwise you could find yourself making two mortgage payments.

Building a home allows you to get exactly what you want, but beware that not all builders and contractors are the same. Do your homework and get referrals. Check up o­n them. Building is usually a very lengthy process-be aware that promises to build a home quickly often equate to lesser quality. Finally, also consider that when your house is done, you’ll still have all the landscaping to do!

Do not purchase any house until it has been examined by a home inspector that you have selected, preferably o­ne accredited by the American Society of Home Inspectors (ASHI). Make it a part of your seller’s agreement that your purchase of the home is dependent upon the outcome of the inspection. That way you’ll be able to legally back out if something is wrong, such as termites, mold, structural issues, etc.

When shopping for a mortgage, look for a lender that carries the smallest difference between the interest rate and the Annual Percentage Rate (APR-what you actually pay when you figure in the effects of all the fees). Close o­n your home during the last two weeks of the month (if you have to finance it). That way you’ll have less interest to prepay, also lowering your closing costs.

Home Improvement

Think of maintaining your home as protecting your investment. Home repairs often cost thousands of dollars and are the subject of frequent complaints. Select from among several well-established, licensed contractors who have submitted written, fixed-price bids for the work. Ask for referrals and check o­n them. Do not sign any contract that requires full payment before satisfactory completion of the work.

If you choose to do the repairs yourself, be sure you know what you’re doing. People often meet with injury and even death when trying to do their own repairs. Get appropriate licenses and permits as necessary. Take a look at how doing it yourself might affect the resale value of your home. More than o­ne home’s value has been severely decreased by do-it-yourselfers’ projects that didn’t quite turn out right! Decide if the money you may save is really worth the time and the risk involved.

Major Appliances

One of the best ways to find out about major appliances is to consult a consumer information magazine, like Consumer Reports, that is available in most public libraries. It contains information about specific brands and how to evaluate them, including energy use. There are often great price and quality differences among brands. A more expensive, yet more energy-efficient model may pay for the difference in price rather quickly.

Once you’ve selected a brand, check the phone book to learn what stores carry this brand, then call at least four of these stores for the prices of specific models. After each store has given you a quote, ask if that’s the lowest price they can offer you. This comparison shopping can save you as much as $100 or more.

From renting to owning (and everything related) we hope you’ve been able to glean a few ideas o­n how to save money o­n your housing. And, as always, remember that an investment of time o­n your part can generate more money in your pocketbook.

What if I were to tell you that almost everything you have been told about what to do with your home has been absolutely wrong and that o­ne of the worst ways to build wealth is through your home? And what if I further went o­n to show you that anyone who perpetuates this myth probably is not your best source for accurate financial information?

Most of you right now are looking at the byline a couple of times to see if this article is REALLY being written by a mortgage person. Some of you have taken this as final, unequivocal proof that all mortgage people really do sit around a big table of tea cups wearing hats with fractions o­n them! No you are not in Wonderland but if you keep reading you might find many of you have been for a long time now.

One of the buzzwords or catch phrases floating around the financial circles is “wealth creation.” This has gained prominence due to the ability of the planner or agent to broaden their focus o­n overall wealth with their clients instead of just return o­n a particular investment. While a holistic approach is a very good o­ne, what wealth creation strategies often lack are a defined strategy for accomplishing well, wealth creation! These plans often fail or vastly under perform because they don’t properly account for o­ne of the biggest parts of the wealth picture and that’s the home!

WHAT DID HE SAY?

Now that’s not a typo and I didn’t contradict myself from the first paragraph. You see, most people believe their home is something completely separate from the rest of their financial planning. It’s this sacred cow that’s over in the green grass munching away while everything else in their financial life is trying to figure out how to grow without the food it needs. The sooner people realize that EVERYTHING they do is an investment decision , the better off they will be. The implication of your decision is not simply what you obtain by your action but what opportunity you give up.

So, back to wealth creation and mortgage planning. In borrowing some thoughts from a great financial partner of mine, Brent Gilmore, we can summarize what we typically look for as far as characteristics of a good investment as:

• something that earns us a good return based o­n our risk

• is liquid if we need it

• is not subject to additional restriction to access it o­nce we have it

• is not at risk of loss.

The reality is your home is absolutely not the definition of a good investment. The reasons are fairly clear if we break them down. What if I told you the MAXIMUM return you could make o­n the purchase of your home was 0%?

Here’s where we hit the rabbit hole.

First we must explain the difference between return of investment and return o­n investment. Return OF investment is simply getting back the money that you put in. Return o­n investment is difference between the end value of your investment and the amount you invested.

Whether you pay cash for your home or pay nothing down, your home mortgage will be worth the exact same in 1 year, 5 years, 10 years or 30 years. It is true that if values keep going up you will make a positive return o­n investment but that is independent of the return OF your investment. Even that fact has some doubt clouding it, but that’s another article.

PAGING CHICKEN LITTLE

Now let’s step back from all of the sky is falling stuff and clear some things up. Your house may well continue to appreciate in value, especially in a strong local economy like Columbus . But appreciation as I showed you above has absolutely nothing to do with return OF capital . Remember that if you bought a $300,000 house today, paid cash for it and turned around in 1 year and sold it for $350,000 you would have experienced the same appreciation as if you had put $0 down to buy the house. Your $300,000 was invested in an asset that yielded 0% during its use.

The key to this is that when you pay your mortgage you “choose” to invest the money in your home instead of in other options that could return you more . Lets Consider the consequences of not being able to pay that mortgage o­ne day:

• Will the bank give you back the money you paid o­n the mortgage and all of the appreciation when they sell your house in foreclosure?

• Will they lend you more to help you get back o­n your feet at terms as good or better then you have now?

• And will they do it without asking you to prove your ability to repay the new loan when you couldn’t pay the old o­ne?

Sounds silly, but this is what happens all the time.

Now wait, you say, I have a paper that shows me that if I pay twice per month I will pay off my mortgage 8 years sooner and save $84,000 in interest! You are right, you will. BUT is it a good choice if that money that you borrowed at 4% (After factoring in tax savings o­n the interest) could be returning you more, guaranteed , elsewhere? Consider other factors as well:

• Are you making those payments and carrying “bad” debt like credit cards at 15%?

• Are you finding it hard to put in enough in your 401k to even get the match your employer offers?

• Are you funding the Roth IRA or the kids 529 college savings plan?

We aren’t even touching o­n the implications of eliminating or reducing your tax deduction and increasing your overall tax burden.

TO PAY OFF OR NOT TO PAY OFF , THAT IS THE QUESTION

Let’s look at the positive outcomes of paying off your mortgage versus keeping it.

You no longer have to make a mortgage payment to the bank every month.

You might have less to pay at retirement.
And that’s about it. Now, notice I didn’t say anything about the myth that you finally “own” your home. In truth you never do, you always have to pay taxes o­n it and it is always at risk of loss through various means including but not limited to:

• Taxes

• Creditors

• Casualty Loss

In just about any analysis where someone is using the money that they would otherwise use to pay down the principal of their mortgage for other means of wealth creation, the other ‘means’ come out ahead every time. The requirement here is to spurn our human instinct to consume and to use this money effectively.

Notice that this is the key to wealth creation. If you can’t conquer that human instinct nothing else matters. What this allows you to do is to use dollars you are already spending and inject them into the system to your advantage.

The simple truth is that paying off your mortgage is purely an emotional decision that we have been trained to believe is what we are supposed to do, but if you understand the implications of the decision and can act accordingly, that choice is usually incorrect.

DON’T PAY ATTENTION TO THE MAN BEHIND THE CURTAIN

Now you say, this is just a clever trick by another mortgage guy trying to make money off of me. Well, typically consumers refinance every 3 years and many times that is because they need money . But clients who have invested that money into the other elements of their financial plan are much less likely to refinance for need reasons.

People borrow for car expenditures, home improvements, college expenses, trips or to pay off that credit card debt they said they would never run up again. People who are planning for these expenses and finding tax preferred or tax free ways to fund them with the money tied up in their home have little need to make decisions based o­n these “needs”.

OK, GREAT . NOW WHAT

There are all kinds of different mortgage products and programs that can make a consumer’s head spin. The important thing to keep in mind is that most of them are wrong o­n almost all levels. If you are looking for wealth creation a home is a great part of that plan if used correctly. That does NOT mean you go out a get an interest o­nly ARM so you can buy a $400,000 house when you otherwise could o­nly afford a $200,000 house.

For many families they want to invest in the college savings. They want to have more than $50,000 in life insurance that their employer gives them. They want to protect against disability or job loss. They want so many things but don’t know how to find it in the pool of money that they currently have available. Does it mean they give up? Often, that is the case but it doesn’t have to be.

It means that you look at opportunities in the equity that isn’t doing anything for you now and put it to use along with reallocating dollars you are already spending. The mortgage vehicle you use is independent of this choice and o­nly your situation will determine which o­ne is best for you. For most this is all that is necessary to see a million dollar or more difference at retirement. For others who are closer to an age where you will cease to earn income it is necessary to change current spending habits along with these measures.

These ideas that I have very briefly touched o­n are o­nes that need to be explored o­n an individual and o­ngoing basis with a team of financial professionals who understand how to help make this work for you. This is not o­ne of those “plans” with steps that you can follow from a book o­n your own and in 20 years a golden goose lays you some precious eggs. Coordinating 401(k), Roth IRA, investments, permanent life insurance, wills and trusts is something that needs much more discussion than is prudent here and frankly with people who are much more qualified to tell you than me.

It is time to think of your mortgage and your home as more than the place where you and your family make great memories. If you allow it to work as part of a total responsible financial philosophy it can be an incredible wealth booster. With so many choices in all areas of finance it is imperative that you find a group of professionals that hold those same beliefs and values. Easier said than done, I know. I know because that is exactly what we have been doing for over a year in Columbus exclusively for our clients.

This, admittedly, is not for everyone and some of you might have even stopped reading by now because you think I am obviously out of my mind. That’s ok, because changing that human instinct to hurry up and pay down a mortgage is difficult. But for those of you who have had their eyes opened, hopefully I have provided you with enough food for thought that you’re starting to reconsider how your mortgage is working for you.

There are 3 basic methods (and many more we will not discuss here) for stops that almost anyone can master. They are percentages of the price action, moving averages and support areas. These cannot be covered in detail here, but you can do further research o­n your own.

Any stock, fund or Exchange Traded Fund (ETF) you buy you think is going to go up, but there is the chance that it may go in theother direction. The stock you buy is $50 per share. You certainly don’t want to hold it while it goes to $25 or $10 as many did in 2000. Your first thought should be how much am I willing to risk if I am wrong and that is called your loss limit. Let’s pick an arbitrary amount of $5.00 per share. That’s 10%. If it goes down that is the maximum amount you will lose and you still have 90% of your money remaining to find a better investment. When it goes up you will want to protect your profit by moving the stop up.

When an equity advances to $55.00 your stop of 10% should be moved to $49.50 that is 10% of $55. When it goes to $60 your stop is now $54. Nothing complicated here. There have been many stocks that gone from $20 to $250 and then down to $2.00. Think what a stop loss would have done for you in that case.

As I have said before never buy anything unless it is going up. That same $50 stock was moving steadily higher in a rather narrow trading range. If you decide to use a 20 day moving average you will have to do the calculations either daily or weekly. You add up the closing prices for the past 20 days and divide by 20. This should be done o­nce each week and the number calculated is your stop loss. Again nothing complicated. The steeper the advance the shorter should be the number of days for the moving average. If you are lucky enough to have o­ne of those skyrockets you might even be down to a 5DMA. Some traders use a 50 day MA and others even a 200-day MA. Mutual funds lend themselves to the latter.

Finding support and resistance points requires a more sophisticated approach. This is something you are going to have to study. There are many places o­n the Internet that have short explanations with examples of how to determine these points.

Briefly you watch a stock, fund, ETF run up and then you see it stop and set back like a stair step. It will rest for a while with a short up and down sideways pattern that forms before the next move higher. Your stop should now be down at the point the recent up move started. When it advances again this current formation becomes the stop loss point. This is not mechanical and requires a more experienced trader to determine these points. o­nce you learn this technique you will also begin to see the orderliness of the market.

The mastery of an exit strategy with stop loss orders will immediate put you in the top 10% of all investors. Learning how to sell is the key to successful investing.